Business

Dissed by Trump, a Pa. pipe-maker says all is forgiven now

DUQUESNE, Pa. — Four days before the election, Donald Trump appeared at a rally in Hershey and took aim at an unsuspecting steel-pipe mill.

"Dura-Bond Pipe laid off 145 workers and moved their jobs overseas," candidate Trump said during a riff on the "theft of American prosperity." The drive-by comment reverberated here in Duquesne, at Dura-Bond Industries.

Jason Norris, president of the family-owned company, said Dura-Bond laid off a shift at its Steelton pipe mill near Harrisburg in 2008 but had added staff during the economic recovery. And Dura-Bond has no operations outside Pennsylvania: The jobs that were eliminated just evaporated, along with 2.6 million American jobs lost in the financial meltdown.

"Do we have an international division we don't know about?" a family member texted Norris after Trump's campaign appearance.

Yet today, there are no hard feelings at Dura-Bond, not after Trump signed a presidential memorandum on his fifth day in office directing the Commerce Department to devise rules requiring all new or retrofitted U.S. pipelines to use only American-made pipe and pipe fittings.

The edict was manna from heaven for a company such as Export, Pa.-based Dura-Bond, which has supplied a number of pipeline projects in the region, including Sunoco Logistics' ongoing Mariner East work. But it has struggled to compete with imports.

"As goofy as Trump is — and he is unorthodox — he has the right idea to want to try to help American manufacturers," said Norris, 47, the third generation of his family to operate Dura-Bond. "And we're happy he specifically called out pipe."

Though it is unclear how the government will be able to legally implement Trump's order requiring private-sector pipeline operators to buy only American pipe, the gesture could not come at a more propitious time for Dura-Bond.

CLEM MURRAY / Staff Photographer

The old U.S. Steel Tubular Products plant in McKeesport, Pa., will resume work under Dura-Bond Industries' ownership plan.

Twelve days before the Jan. 24 presidential order, Dura-Bond announced it had acquired a shuttered former U.S. Steel pipe mill near Pittsburgh. The plant, idled in 2014, is the last remnant of the gigantic National Tube Works in McKeesport, Pa., which a century ago was America's center of pipe-making. Now, it is mostly cleared waterfront brownfields and empty warehouses.

Dura-Bond plans to hire at least 100 people to operate the McKeesport plant when it reopens later this year. The company bought the equipment from U.S. Steel and is leasing the 317,000-square-foot plant from the Regional Industrial Development Corp., which owns the property. Norris expects to buy the real estate once the state certifies that environmental cleanup is completed.

"I want to see pipe going down the road with our name on it, where U.S. Steel couldn't do it — U.S. Steel!" he said. "And here's this little company that can."

The American steel industry, which underwent a major contraction in the 1970s, could use a lift. Although worldwide demand has doubled over the last four decades, U.S. production of steel and tubular products has largely leveled off, and U.S. market share has slipped.

"It is tough to manufacture in the United States," said Norris. "You have to be able to compete with companies that aren't playing by the same rules."

China now produces half the world's crude steel, and its dominance in steel pipe is even more dramatic: In 2014, it made about 65 percent of the world's tubular steel of all sizes, according to the World Steel Association.

Much of the pipe for the Keystone XL Pipeline, which Trump revived after it was stalled by the Obama administration, was manufactured from Chinese steel at pipe mills in India.

"Why would they be able to buy steel from China, make a pipe in India and coat it over there, send it in here, truck it inland, and set it on the ground cheaper than I can buy a piece of steel here to make pipe?" Norris asked. "Something's not right with that equation."

Dura-Bond did not set out to manufacture pipe. The company was founded in 1960 by Norris' grandfather to apply coatings to pipelines to protect them in the ground from corrosion.

But with the demise of domestic pipe manufacturing, Dura-Bond saw the need to preserve its supply of steel pipe, and in 2003, it bought the former Bethlehem Steel pipe mill in Steelton.

"We bought that pipe mill to save the coating business," Norris said. "The pipe mill was scrap. It was literally run into the ground."

Likewise, Dura-Bond stepped in this year to buy the plant in McKeesport. The company has a large pipe-coating plant here in Duquesne, just two miles down the Monongahela River from McKeesport, and saw that pipe mill's closure as a threat to its coating business.

With both plants, Dura-Bond competed with buyers who wanted to ship the pipe mills' machinery to China. It convinced the sellers that it was better for American steel producers to keep a big customer like a pipe mill operating in this country.

"So now we own two pipe mills," Norris said.

The pipe Dura-Bond produces is targeted at the energy industry, primarily high-pressure pipelines that handle large volumes of oil and natural gas. These days, Dura-Bond employs about 500 at its two coating plants and its pipe mill.

The gigantic Steelton facility, which produces pipe from 24 to 42 inches in diameter, makes individual sections from heavy steel plates. Trump's comments in the fall to the contrary, the plant has been ramping up production in recent years to supply several large Marcellus Shale gas-pipeline projects.

The Steelton operation is going full tilt to produce large-diameter pipe for Dominion Resources Inc.'s 550-mile Atlantic Coast Pipeline, which will deliver Marcellus and Utica Shale gas to the Carolinas.

At Steelton, workers feed 40-foot-long plates of cold steel weighing more than six tons each into a series of enormous presses that bend the steel into cylinders. The edges are welded robotically, forming a linear seam along the pipe, which then is subjected to a series of ultrasonic tests, pressure tests, and laboratory examinations.

At McKeesport, pipe ranging from 8 to 20 inches in diameter will be produced from long coils of flat-rolled steel continuously fed through a series of presses that shape it into cylinders. The edges are welded together before the pipe is cut to length according to order. Each piece of pipe gets is hand-ground and finished to remove imperfections.

The McKeesport plant produced the pipe used in Sunoco Logistics' Mariner East pipeline, which Dura-Bond coated. After the McKeesport plant closed, Sunoco procured 20-inch pipe from producers in Indiana and Louisiana for its new 350-mile Mariner East 2 pipeline, though Dura-Bond got much of the coating business.

The coating plant in Duquesne takes raw steel pipe, cleans up the surface, and applies a blue-green protective epoxy finish to the outside.

"The biggest part of any pipeline is the acquisition of right of way and the physical installation of the pipe," Norris said. "The pipe itself is maybe 10 percent of the cost. The coating is maybe 10 percent of the pipe cost, so it's a pretty small percent of the overall cost."

Norris said he was concerned about the quest for ever cheaper goods, produced overseas, at the expense of meaningful work for Americans. "It's the Walmart syndrome, a race to the bottom."

He views his company as an "economic machine" that pours money into a wide range of suppliers providing everything from made-to-order machinery to ordinary gear.

"When we look at our spend, it's amazing how much money is pumped back into the economy, from people who sell welding wire and gloves and respirators and grinding discs. We buy like 50,000 grinding discs a year. That money all gets churned back out."

If a pipe mill closes, perhaps 400 jobs disappear. "But when you look at everything, how many other businesses are going to lose 10, 15, 20 percent of their business because we shut down? ... That's the downward spiral I was talking about.